In the 2022 holiday season, which includes the first two months of the company’s fiscal fourth quarter, Kirkland’s comparable sales fell 5.5% versus the same period a year earlier, the company announced.
Comps were flat in November 2022 but slipped 11% in December year over year.
The decline was larger than the company anticipated, so Kirkland’s now expects that it will end the fiscal year with 15 million to $17 million in net borrowings and with inventory closer to the high end of the $70 million to $80 million range.
“While sales trends began to improve in November, a continued volatile consumer environment in December impacted customer traffic following our Black Friday promotional events,” said Woody Woodward, president and CEO of Kirkland’s Home, in announcing the comps. “We accelerated our promotional activity in December to generate sales momentum as we closed out the holiday season, but we were unable to overcome the impact of the decline in traffic and the effect on our merchandise mix of an extended period of significant inventory reduction. Based on the December sales results, we are adjusting our year-end balance sheet expectations accordingly.
Woodward added, “Although these results are disappointing, we remain confident that fiscal 2023 will be a year of stabilization for our organization. We are also pleased with the consistent positive performance of our furniture category, which has continued to grow into a larger percentage of our sales. We still believe that we will start the year from a position of strength given a healthier balance sheet and having made significant progress on our inventory reduction goals, and we remain hyper-focused on executing our stabilization strategy for fiscal 2023. We look forward to progressing on several strategic initiatives, including maintaining a leaner inventory position, further optimizing our product mix, capitalizing on margin improvements from a normalized supply chain environment, and curating price points that appeal to a broader customer base.”
